Penal Interest

[deepak kalambate]

Dear Sir,

Please let me know whether penal interest as per the provision of Rule 8 (3A) of Central Excise Rules, 2002 is applicable when Central Excise duty voluntary paid as per CAS-4 Certificate along with interest @ 18% p.a.

Thanks & Regards

Deepak R Kalambate

AI Summary

Penal interest under Rule 8(3A) challenged where differential duty paid post cost audit; provisional assessment or acceptance avoids penal interest.
Applicability of penal interest under Rule 8(3A) is contested where a manufacturer pays invoiced duty during the year, obtains a cost audit certificate at year end and pays differential excise duty with interest. If the Department has accepted or been informed of this practice (or the assessee adopts provisional assessment), penal interest ordinarily does not apply; absent such intimation or acceptance the lapse is procedural and may attract penalty consequences. No authoritative circular was cited; the advised course is to obtain departmental acceptance or opt for provisional assessment for future transactions.